Bishop on Housing

An excellent post by Hutt South MP Chris Bishop on the problem in the Hutt. First the facts:

• The average house in Lower Hutt is now $596,000. This is about 6 times the median household income in New Zealand.
• The average rent in Lower Hutt is $452 per week.
• The social housing wait list in the Hutt is at record levels, with 404 clients waiting for a house.
• The government is spending a million dollars every quarter on housing people in motels in the Hutt Valley.
• Housing NZ has only built 4 units (16 bedrooms) since September 2017.

Then the diagnosis:

It’s all about supply
Another point I have tried to get across is that solving our housing woes comes down almost exclusively to supply. The above facts and the worked example I have shown demonstrate that. Consider Canterbury after the earthquakes. Government, through the extraordinary powers given to it post the quakes, unilaterally rezoned a lot of land to clear the way for more housing. Supply filled the market and for many years Canterbury had flat to falling rents. I heard anecdotal stories of landlords having to induce university student tenants with heat pumps, insulation, and other things in order to encourage them to pick their flat to live in. In Wellington, students line up for hours for the chance to bid on a hovel with mould on the walls. When supply exceeds demand, the power is with tenants. When demand massively exceeds supply, as it does in the Hutt, landlords have all the power.

Then his solutions, which I paraphrase:

  1. Acknowledge is that this is a regional and also national problem – we need our Councils to work together more and take a much more regional approach.
  2. We need to build out – the cost of land is the biggest driver. Open up the Upper Fitzherbert Road area in Wainuiomata, and connecting the suburb to Naenae; some estimates I’ve seen are that around 2,500 to 3,000 houses could potentially be built there.
  3. Better infrastructure financing. Endorses recent Phil Twyford speech to NZ Initiative on this issue
  4. We need to build up. Supports changes in density rules and intensification around transport spine.
  5. Be more cognisant of the trade-offs inherent in planning. Some recent studies estimate, for example, that rules setting minimum floor space requirements and minimum balcony requirements add $50,000 to $100,000 to the cost of an apartment. A study examining minimum car parking requirements in Auckland showed that the costs of the planning rule exceeded the benefits by a factor of at least six. That rule cost the economy (and apartment buyers) millions of dollars.  Platitudes like “quality urban design” etc sound great; but we have to be aware of the trade-offs.
  6. Reform the RMA.

Great to see a local MP do a good job of identifying a problem, identifying what causes the problem and proposing solutions.

Housing in the Hutt is a disaster, and getting worse, but it doesn’t have to be this way. In this piece I’ve tried to outline some solutions. Some will be led by government, a lot by Council. Some require political courage and community buy-in. But if we carry on the way we are, then housing will continue to become more unaffordable, more people will be locked out of home ownership, and homelessness will become entrenched in our community.
Let’s fix it.

A good challenge for the new Council after elections in October.

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